MENU

3 shares both Warren Buffett and Elon Musk would love

The last week has been interesting for investors as two billionaire CEOs, Warren Buffett of Berkshire Hathaway and Elon Musk of Tesla went head to head with their views on what creates a competitive advantage for companies.

Buffett and his partner Charlie Munger popularized the term ‘moat’ which refers to the competitive advantage that one company has over another, but Musk has different views.

During a Tesla Q1 earnings call, Musk said “First of all, I think moats are lame. If your only defence against invading armies is a moat, you will not last long. What matters is the pace of innovation. That is the fundamental determinant of competitiveness.”

He also went on Twitter and said, “Saying you like “moats” is just a nice way of saying you like oligopolies”. Ouch, I guess that leaves out our big banks the Commonwealth Bank of Australia (ASX: CBA)Westpac Banking Corp (ASX: WBC)Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB).

Surely there must be companies that are both highly innovative and have a distinct competitive advantage. With that in mind, here are 3 Australian companies that I think both Warren Buffet and Elon Musk would like:

SEEK Limited (ASX: SEK)

Seek owns the top online employment listing sites in Australia, New Zealand, Brazil & Hong Kong which makes it the first port of call for employers and job seekers. The company is also innovating by investing heavily in its artificial intelligence (AI) capabilities to assist job recommendations.

Xero Limited (ASX: XRO)

Xero, the fast-growing accounting software provider gets its moat from the ‘stickiness’ of its product. The cost and effort of switching accounting packages keeps customers locked in. Its highly innovative cloud-based software integrates well with third party applications. The company has successfully targeted the niche SME space and taken its concept global.

Cochlear Limited (ASX: COH)

As the undisputed global leader in the production of hearing implants, Cochlear has a clear advantage in this space. It’s also highly regarded for its innovation which provides it with valuable intellectual property.

Elon Musk and Warren Buffett are not the only billionaires with an eye for good investments. Have a look at the new technology that this Japanese billionaire is investing into.

Japanese Billionaire’s Prediction Will Give You Goosebumps

When a veritable investing and entrepreneurial genius speaks, it pays to listen.

In fact, he's now preparing a $100B "war chest" to invest entirely in this "terrifying" new technology, which could spell huge profits for investors.

Click here to learn about this technology and how you can profit!

Kevin Gandiya owns shares of Twitter.

You can follow Kevin on Twitter @KevinGandiya.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Berkshire Hathaway (B shares), Tesla, and Twitter. The Motley Fool Australia owns shares of National Australia Bank Limited and Xero. The Motley Fool Australia has recommended Berkshire Hathaway (B shares), Cochlear Ltd., and SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!